Gold, copper prices hit record highs

10th December 2010, Comments 0 comments

Gold and copper prices struck record highs this week, oil benefited from a weaker dollar and strong Chinese imports, while cocoa futures won support from violence gripping Ivory Coast.

PRECIOUS METALS: Gold prices struck a record high 1,431.25 dollars an ounce on Tuesday when the safe-haven metal was lifted by concerns over the eurozone debt and deficit crisis. But it ended the week lower on profit-taking.

"Renewed eurozone fears continue to keep the market underpinned," said VTB Capital analyst Andrey Kryuchenkov.

Gold's rally helped sister metal silver reach its highest point in 30 years, at 30.70 dollars an ounce.

"The high-altitude flight of precious metals remains unbroken," said Commerzbank analysts.

"The main factors in this latest rally are uncertainty about the debt crisis in the eurozone peripherals and possible further easing of US monetary policy, as hinted by Fed chairman Ben Bernanke."

By late Friday on the London Bullion Market, gold fell to 1,375.25 dollars an ounce at the late fixing from 1,403.50 dollars a week earlier.

Silver rose to 28.79 dollars an ounce from 28.74 dollars.

On the London Platinum and Palladium Market, platinum dropped to 1,673 dollars an ounce from 1,718 dollars.

Palladium slipped to 737 dollars an ounce from 758 dollars.

BASE METALS: Copper prices soared to an all-time peak at 9,091 dollars a tonne on Thursday as traders mulled the chance of the US Federal Reserve launching a fresh round of monetary stimulus.

Meanwhile copper "is firmer partially on the back of various forecasts highlighting next year's likely supply deficits", said William Adams, head of research at

By late Friday on the London Metal Exchange, copper for delivery in three months jumped to 9,030.50 dollars a tonne from 8,730 dollars a week earlier.

Three-month aluminium climbed to 2,335.75 dollars a tonne from 2,322 dollars.

Three-month lead rose to 2,416 dollars a tonne from 2,359 dollars.

Three-month tin increased to 26,000 dollars a tonne from 25,690 dollars a week earlier.

Three-month zinc gained to 2,290 dollars a tonne from 2,227 dollars.

Three-month nickel grew to 23,990 dollars a tonne from 23,550 dollars.

OIL: Oil prices rose to their best levels in more than two years above 92 dollars a barrel thanks to a weak dollar, making crude cheaper for holders of rival currencies and lifting demand.

Prices meanwhile won support late in the week following strong Chinese import data and ahead of Saturday's meeting of OPEC to set the cartel's output levels.

China said Friday that exports and imports hit record highs in November, which analysts said would ramp up pressure on Beijing for further interest rate hikes and a stronger currency.

"China's crude oil imports soared in November by 22 percent, year-on-year, to 20.9 million tons (5.09 million barrels a day)," noted analysts at Commerzbank.

"China thus remains the main driver of global oil demand."

Oil demand and prices are meanwhile showing a year-end spurt, pushed by global growth and a surprising pick-up in advanced economies, but these pressures should ease in the medium term, the IEA said on Friday.

Strong growth in Asia remains the main driver of new demand for oil, but the International Energy Agency warned that inflation in China could unwind with a "hard landing".

Diesel was the key factor in the growth of demand, partly owing to the use of small generators and harvesting equipment in China. Another factor was rising demand for gasoline (petrol) for US motorists.

Elsewhere on Friday, the Organization of Petroleum Exporting Countries raised its forecast for oil demand in 2010 because of global economic recovery and cold weather in Europe, a day before OPEC ministers meet on production levels.

OPEC, which pumps about 35 percent of world oil, meets in the Ecuadoran capital on Saturday with the goal of keeping quotas as they are, despite a recent rise in the price of oil and a forecast increase in demand.

The meeting will be the last before Ecuador hands OPEC's rotating presidency to Iran for 2011 -- the first time in 36 years the Islamic republic will be the temporary leader of the cartel.

Stimulated by a weak US dollar and a cold snap in Europe and parts of the United States, the price of a barrel of crude recently broke the psychologically important 90-dollar barrier for the first time since October 2008.

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in January rose to 91.40 dollars a barrel from 90.90 dollars a week earlier.

On the New York Mercantile Exchange, Texas light sweet crude for January climbed to 88.88 dollars a barrel from 88.15 dollars.

COCOA: Cocoa futures hit four-month highs as fears grew for the stability of top producer Ivory Coast in the wake of disputed presidential elections in the west African nation. They ended the week lower however after investors banked profits.

On LIFFE, London's futures exchange, cocoa for March jumped to 2,081 pounds per tonne, hitting the highest level since late August.

And on the New York Board of Trade (NYBOT), cocoa for delivery in March rallied to a similar multi-month high at 3,140 dollars a tonne.

"The rather unpleasant background to this price rally is the unstable political situation in Ivory Coast, the world's main cocoa producer," said Commerzbank analysts.

"After the uncertain outcome of the presidential election, there have evidently already been bloody clashes between the two camps, which is raising fears of another civil war."

Some 2,000 people have fled Ivory Coast following last week's presidential elections which led to deadly violence, the UN refugee agency said Friday.

UN staff began evacuating from Ivory Coast on Tuesday amid fears that a tense standoff could turn violent, as international pressure mounted for incumbent President Laurent Gbagbo to quit power.

Pressure has mounted on Gbagbo, 65, who has defied calls to end his 10 years in power after the United Nations recognised his rival Alassane Ouattara as president following an election marred by deadly clashes.

US President Barack Obama has written to Gbagbo urging him to cede power to Ouattara.

By Friday on NYBOT, cocoa for delivery in March fell to 2,896 dollars a tonne from 2,902 dollars a week earlier.

On LIFFE, cocoa for March dipped to 1,912 pounds a tonne from 1,935 pounds.

SUGAR: Sugar futures retreated.

By Friday on NYBOT, the price of unrefined sugar for delivery in May stood at 25.59 US cents a pound compared with 28.58 cents for the March contract a week earlier.

On LIFFE, the price of a tonne of white sugar for March dropped to 721.30 pounds from 735.40 pounds.

COFFEE: Coffee prices extended recent gains.

By Friday on NYBOT, Arabica for delivery March increased to 209.25 cents a pound from 206.10 cents the previous week.

On LIFFE, Robusta for March stood at 1,906 dollars a tonne compared with 1,819 dollars for the January contract.


© 2010 AFP

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